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Upbeat US data lifts Footsie back into positive territory
Renewed recovery hopes for the US economy gave British blue chips a late session boost yesterday.
Figures in America showing a far better-than-expected reading for durable goods orders – a key economic indicator – sent stocks bouncing higher on Wall Street and across world markets.
London's Footsie closed up 49.96 points at 4279.98 – 1.2 per cent – after struggling for direction for much of the day.
The Dow Jones Industrial Average raced nearly 100 points higher in early trade thanks to data revealing that orders to US factories for manufactured goods jumped by 1.8 per cent for the second consecutive month in May – three times more than forecast.
Manufacturing, which accounts for about one third of the economy, provides a good barometer for overall business health, and the May durable goods orders report showed solid gains.
New orders excluding transportation advanced 1.1 per cent last month, compared with a forecast for a 0.4 per cent decline, buoyed in part by a 7.7 per cent rise in new machinery orders.
This was the largest percentage increase in that category since March 2008, the Commerce Department said.
In the UK, Bank of England Governor Mervyn King gave a sobering view on the economy, telling MPs he was "more uncertain now than ever" on the UK economy, with doubts also over the global recovery prospects.
The cautious comments failed to hold back share rises, however, with miners soaring higher on US recovery prospects.
Xstrata's merger target Anglo American was the leading blue-chip riser, up 168p to 1820p, as investors speculated on further bid interest in the firm.
Among the banks, Asian-facing Standard Chartered advanced 60p to 1195p on hopes for an upbeat statement on first-half trading later today.
Barclays was also 113/4p up at 2703/4p, while Royal Bank of Scotland rose 3/8p to 351/2p despite being named by the Banker magazine as the world's most loss-making bank.
But some financials were on the back foot, including hedge fund Man Group which fell 113/4p to 2751/4p, or 4 per cent, after Morgan Stanley placed 12 million shares.
Retailers were also under pressure after Comet owner Kesa Electricals posted annual losses of 81.8m and warned of another difficult year.
B&Q owner Kingfisher lost ground in the top flight, down 25/8p to 1727/8p.
Food retailer Morrisons was also down 41/2p to 2393/4p despite further signs of progress in Tuesday's TNS market share figures. Tesco dropped 51/4p to 3571/4p.
And while Kesa said there was no recovery in its markets, the fact that first quarter trading had been in line with expectations meant shares recovered from a weak start to rise 63/4p to 1091/2p.
Other major moves outside the top flight included a rally of 15 per cent for Yell.
The directories publisher has been battered this week by concerns about its 4bn debt pile, but shares rose 31/2p to 271/2p.
It was joined on the FTSE 250 Index risers' board by car dealership Inchcape, which rose 15 per cent, or 21/2p, to 183/4p after a better-than-expected trading update.
Transport group Stagecoach cheered 10p to stand at 1273/4p following the publication of annual results showing a 13 per cent rise in annual profits.
The biggest Footsie risers were Anglo American, Lonmin ahead 80p to 1214p, Kazakhmys lifted 401/2p to 630p and Eurasian Natural resources ended the day 421/2p higher at 6621/2p.
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Sunday 12 February 2012
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